As an AML professional with decades of experience, I’ve witnessed firsthand the relentless evolution of financial crime and the challenges it poses to our industry. Today, the scale of illicit activity is staggering: according to the Nasdaq Verafin 2024 Global Financial Crime Report, $3.1 trillion in money laundering and illicit funds flowed through the global financial system in 2023 alone. Drug trafficking, human trafficking, terrorist financing and countless other predicate crimes continue to test the limits of our investigative capabilities.
The Problem: Siloed Data and Limited Visibility
Traditionally, financial institutions have fought financial crime in isolation. Each institution can only see the activity flowing in and out of its own walls, leaving investigators with a narrow view of counterparties and limited context for anomalies. When an alert is triggered — perhaps by a suspicious transaction or an unfamiliar counterparty — AML investigators often lack the information needed to determine the true level of risk. This siloed approach not only hampers efficiency but also increases the risk of defensive filings and missed opportunities to disrupt criminal networks.
Consortium Data: A Collaborative Solution
Consortium data offers a transformative solution to these challenges. By leveraging shared intelligence from a trusted network of peers, financial institutions gain unrivaled visibility into risks and hidden connections. Nasdaq Verafin’s consortium draws insights from over 2,700 financial institutions and 800 million counterparties, all without sharing personally identifiable information (PII). This collective intelligence enables institutions to quickly detect and address potentially suspicious transactions as well as transactions with known trusted counterparties — speeding up investigations, supporting compliance, improving decision-making and reducing false positives.
The consortium model operates on a “give-to-get” principle: as each institution contributes data, the entire network benefits from richer insights. Importantly, the approach protects PII, ensuring privacy while delivering actionable intelligence. Whether it’s identifying risky counterparties or confirming trusted ones, consortium insights reduce false positives and empower investigators to focus on what matters most. To understand the true value of this collaborative approach, let’s take a look at some real-world examples where AML consortium insights can be applied to challenging financial crime typologies.
Detecting Money Mules: Seeing the Bigger Picture
From a single institution’s perspective, mule activity can be nearly invisible — new accounts, anomalous transactions and limited information about external counterparties can all play a role in hindering detection. Consortium insights change the game by revealing patterns across institutions. When one member flags a transaction as fraudulent, that intelligence is shared across the network. Investigators can then identify accounts involved in mule activity, even if those transactions never appeared in their own systems.
This broader context not only helps institutions file meaningful suspicious activity reports (SARs) but also enables them to intervene before funds are moved, disrupting criminal operations in real time. The ability to detect networks of mules — such as multiple accounts defrauding the same victim or one mule funneling money to many others — further demonstrates the power of collective intelligence in action.
High-Risk Entities: Enhanced Due Diligence Through Shared Intelligence
Regulatory pressure to monitor high-risk entities continues to mount. Internal processes like customer due diligence (CDD) and customer risk rating are essential, but they only go so far. Consortium insights allow institutions to identify high-risk customers and counterparties that might otherwise fly under the radar. For example, if another institution has labeled an entity as a cannabis-related business (CRB), a politically exposed person (PEP) or a money services business (MSB), that intelligence becomes available to the entire network, prompting enhanced due diligence and more accurate risk determination.
This peer-sourced intelligence supports compliance and helps institutions stay ahead of emerging typologies. With more than 20 high-risk customer entity types available within the Nasdaq Verafin consortium, investigators gain a comprehensive view that goes beyond what any single institution could achieve alone.
Shell Companies: Unmasking Hidden Risks
Shell companies are notoriously difficult to detect, often used by bad actors to obscure ownership and facilitate illicit activity. Consortium analytics provide a powerful lens for identifying shell behavior such as shared addresses among hundreds of entities, risky international payments to secrecy jurisdictions, lack of business-as-usual transactions and lack of web presence. By aggregating data across the network, investigators can spot red flags that would be invisible in isolation.
When multiple institutions observe suspicious patterns, the consortium assigns higher risk scores, enabling investigators to act with confidence. This holistic view helps connect the dots between shell companies and other potentially suspicious entities, ensuring that no piece of the puzzle is overlooked.
AML Consortium Insights: The Future of AML Investigations
By leveraging shared intelligence, financial institutions can combat financial crime more effectively, identify risky counterparties and networks, and speed up investigations. The future of AML lies in collaboration — and AML Consortium Insights are leading the way.
The key benefits are clear:
- More accurate risk determination
- Improved regulatory compliance
- Increased investigative efficiency
If you’re interested in learning more, check out our Consortium Insights webinar, where I chat with Nasdaq Verafin’s Director of Software Development Ben Ruddock. We dive into these topics and more — and highlight how AML Consortium Insights can unlock the full potential of collective intelligence and transform the fight against financial crime.
About the Author:
CHUCK TAYLOR
CAMS, CAFP, Head of AML Commercial Strategy, Nasdaq Verafin
Chuck serves as the subject matter expert on AML regulations, industry trends, and best practices for financial crime prevention for Nasdaq Verafin. His role involves providing strategic insights to enhance the company’s financial crime solutions and assisting clients in navigating complex compliance requirements.
Prior to joining Nasdaq Verafin, Chuck served as Executive VP, Head of Financial Crimes Advisory (FCA) at AML RightSource. The FCA Practice at AML RightSource is a full-service advisory consultancy providing BSA Program support for all types of covered financial institutions.
Prior to Joining AML RightSource, Chuck was SVP and BSA Officer for City National Bank (CNB) a subsidiary of Royal Bank of Canada (RBC). Chuck had oversight responsibility for all aspects of the BSA function including maintenance of the Bank’s BSA program, BSA Risk Assessment, AML Transaction Monitoring, Currency and Suspicious Activity Reporting, Customer Identification Program, Sanctions filtering and BSA Training.
